SEC to beef up enforcement efforts against insider trading

by Kathleen A. Martin,

Posted at Mar 30 2013 11:02 AM | Updated as of Mar 31 2013 08:03 PM

MANILA -- The Securities and Exchange Commission chief said stronger enforcement should be expected from the agency as it beefs up its surveillance efforts.

"I've been frustrated about enforcement actions because probably we lack resources but I would like to improve on that and step up on enforcement because that's what the SEC is supposed to be for," Teresita J. Herbosa told ANC's Inside Business.

Herbosa recounted the SEC is currently investigating a number of insider trading complaints but the process involves on relying on brokers' reports and analyzing them from there.

The number of daily transactions, and tracing where the shares ended up and who gained more or lost take a lot of time and need a lot of people and resources, Herbosa shared.

"But we've already acquired a new surveillance system that would already alert us of some the goings-on in the market," she said.

This new equipment, she noted, would run parallel to the Philippine Stock Exchange's own surveillance system to better prevent and curb fraudulent trading activities.

Aside from beefing up enforcement efforts of the agency, Herbosa said she looks forward to the introduction of more financial products in the market to help support a sustainable economic growth for the country.

"I would like to focus on making the market more liquid because more cash has been coming in but we don't have the products to offer to them," Herbosa stressed.

Moreso now that the Philippines has been assigned an investment grade rating by Fitch Ratings, Herbosa expects a surge in foreign investors wanting to cash in the country's good economic prospects.

"It's a matter of maintaining good corporate governance in these publicly-listed companies for them to attract these cash coming in," Herbosa said.

"We also have to weed out those that are not good investments because you know how these foreign investors react to bad investments: they would go right away," she continued.

The stock market finished at a fresh peak of 6,847.47 on Wednesday, rallying during its last hour of trading after Fitch announced its upgrade of the Philippines' credit rating.

The central bank, while welcoming the upgrade, also stressed it would be watchful of any volatile inflows foreseen to come in as the Philippines now is expected to attract more funds from abroad.